Here, in the concluding part, he unpacks his thoughts on downloadable content, offers his views on second-hand game sales and talks a little about the Gears of War movie.

Q:
You recently made quite a pertinent point about Wii - that it's like a virus - the appeal passes from person to person, before the interest dies out...

Michael Capps:
It's got the same transmission pattern. Someone put out an interesting statistic - that 70 per cent of Wii Fits were used once.

Q:
Do you see the rise of social gaming - on PC, mobile games, XBLA, etc - as an opportunity or a threat, considering your titles are still essentially hardcore...

Michael Capps:
Interesting. No, I mean, rising waters raise all ships, right? It's great that my niece is playing videogames all the time, because she's going to grow up and buy games on an Xbox. She has a DS and a Wii and she loves it, she plays MySims... and my mum's playing videogames because of the Wii... and when I make her play Gears.

I think that's great - we're solidly cementing the videogame generation. Reggie and the guys at Nintendo of America have done a wonderful job of making it a more pervasive part of culture. How can we not win?

Q:
So as the audience grows do you feel you'll become less beholden to the hardcore audience? Do you care what they say on NeoGaf or your own forums anymore?

Michael Capps:
Oh wow, that's tough! We go with our gut at the end of the day, because we have to. There are, I don't know, 10,000-15,000 users on our forums and there's a hundred who are really, really vocal about what we do wrong and complain no matter what.

We have a joke that we could fix something, then there's another 'top three things that must be fixed or you're idiot assholes'. Balancing is tough, but we have to have our hardcore out there saying "Gears of War 2 is even better than Gears 1 - go out and buy it!" - we've got to have those guys. So we need the hardcore, but the only way I'm going to double my sales is by expanding my reach - I can't sell two copies to each person who bought Gears 1.

Q:
The expanded narrative element in Gears 2 involves a love story. How did that come up?

Michael Capps:
Some kids are going to roll their eyes! I don't know, it was always there. Probably Rid the producer pushed the hardest for it - he's the guy who gets really pissed off when we have the opening story and never close it. You know we kept saying Dom's got his wife, Maria, and in the first one he asked Franklin if he'd seen her...

Gamers care. The hardcore guys are like, "Tell me what happened - what happened to Adam Fenix, why was Marcus in jail?" They want to know. So we pushed pretty hard for doing that, and when we got the first pass of the script, it was gorgeous, we just loved it. I do worry, but there's a button for skipping cinematics, so the kid with no patience can skip it, I suppose that's okay - but I sure hope you give it a try - there's enough blood and guts in there.

Q:
How do you see downloadable content evolving over the next few years?

Michael Capps:
I'm not sure how big it is here [in Europe], but the secondary market is a huge issue in the United States. Our primary retailer makes the majority of its money off of secondary sales, and so you're starting to see games taking proactive steps toward that by... if you buy the retail version you get the unlock code.

I've talked to some developers who are saying "If you want to fight the final boss you go online and pay USD 20, but if you bought the retail version you got it for free". We don't make any money when someone rents it, and we don't make any money when someone buys it used - way more than twice as many people played Gears than bought it...

Q:
Do you see an enemy in this equation? Is it the retailer, or the purchaser of second-hand games?

Michael Capps:
I'd hate to say my players are my enemies - that doesn't make any sense! But we certainly have a rule at Epic that we don't buy any used games - sure as hell you're not going to be recognised as an Epic artist going in and buying used videogames - because this is how we make our money and how all our friends in the industry make money.

I think a little bit of it is education so people realise that the reason there's no PC market right now is piracy. I mean, Crytek just put out some numbers saying the ratio was 20:1 on Crysis, for pirated to non-pirated use. So guess what? That's why there's no Gears of War 2 on PC, because there's no market, because copying killed it - and that's gruesome to a company like ours that's been in the PC market for so long.

We're trying to fix it, there's a new alliance of companies trying to make PC gaming work again. But if people are playing games without buying them, then the games aren't going to keep coming.

Q:
Do you see widescale changes to the retail model in the next few years then? I mean, with electronic distribution systems like Steam and XBLA, do you think buying from a store on the high street is history?

Michael Capps:
I think we're a long way from losing the impulse buy when you walk into the mall or the game store and decide to pick something up. That's going to be there for a long time. But we love Steam. I know that day... not only do I get the cheque that day for all the games that sold, but I also know, we sold 28 copies of UT in Poland yesterday, and here's the money!

I know where we're successful and where we're not - I can react on day one of sales, know that, "Gosh we're not hitting the numbers in Poland that we expected, why is that? Oh s**t, there's a problem with the translation, or whatever, let's fix it right now!"

We're able to respond immediately. That model's so wonderful from a developer perspective, not just making money, but knowing where my customers are and being able to make them happy. With retail, I just don't have that - I get "Oh Europe came back with this many numbers," and I get that 60 days after we ship.

And I think DLC will be increasing in scope just because in the US we really need to make strides against the second-hand market.

Q:
But this wouldn't stretch as far as an episodic game?

Michael Capps:
It's tough, because we're sort of outspoken on episodic games. I mean, we could have dropped the last half of the single player in GoW2 and made that downloadable, but of course that really would have upset people who don't have Live. I don't want to hurt customers who are just trying to play our game.

Q:
You mentioned the Gears of War movie earlier. How do you all feel about that? It must be exciting, but at the same time aren't you worried its going to be Hollywood-ised into some idiotic action flick?

Michael Capps:
Well, I hope it's a little Hollywood-ised. We're trying to appeal to two very different audiences - the ones who want some entertainment for an hour and a half and the ones who'll play the game for 12-15 hours.

Yeah, there's a little bit of fear - there have been some really bad game movies recently, but the folks at Newline are serious movie makers, and having Legendary Entertainment pop on, they just did the Batman movies and 300 and Watchmen's coming - these are guys who really get that 'mature kid' demographic - guys like us, 30-year-old guys who love to play videogames. They know how to hit that segment, and make something cool, and not screw it up. I'd be really shocked if it was not cool.

But you know, no-one makes any money from movies except the movie studio - we're doing it because our fan will be interested, and hopefully it'll get the word out about the franchise a bit more.

Q:
Is the movie going to be running a parallel narrative to the games, or filling in gaps between or before them?

Michael Capps:
We haven't said much about the movie. It will be bits that the Gears fans will recognise and some new bits - we've got to take things a little bit differently to get it to fit into an hour and a half. Len Wiseman's directing, who did Underworld... that's good to know.

Q:
Will you have creative input?

Michael Capps:
Yeah, definitely. Cliff primarily - I think he'll be an executive producer. I oversee all of our license material and franchise stuff. I work with DC - I met our author for the books for dinner recently. I focus on all that stuff to make sure no-one screws up our baby. A bad movie could really ruin our franchise very quickly.

Q:
I would have thought comics were the more natural platform for GoW. It's a longer narrative form and also the intensity of the games can really come across in panels on a page.

Michael Capps:
Yeah, first of all, I can put twenty dudes on the page and not worry about it. I can make a massive invasion and not worry about it. So we're doing things in the comic that it's really hard to portray in a game that's as high-detailed as ours is. But, yes, the splash of red from a chainsaw just works so well in a comic.

Q:
So going ahead, you mentioned that you weren't really businessmen at Epic - do you have a five-year plan for the company?

Michael Capps:
Well, sure we do. We're worrying about next-generation consoles of course, we're working on Unreal Engine 4, getting ready for that. And you know, we'll see how GoW2 does and whether it makes sense to stay in that franchise - it was described inaccurately as a trilogy at one point, but as we said after making Gears 1, we'll see if anybody likes it.

And I think Gears 2 is better than the first one - everything from our objective play testers' numbers to folks who've spoken to reviewers who said they liked it better - that's huge praise because we thought we'd caught lightning in a bottle last time.

Q:
Which key addition do you think is going to be the winner - what's going to get people talking?

Michael Capps:
Horde is probably the biggest surprise for us - it was sort of a tack on; let's take this little game mode we did for UT and muck about with it a bit and it just stuck. We just find our guys playing it all the time. I love it when you hear people yelling "There's a flamer coming down the stairs!" That's what we want - is people coordinating like a small fire team in the military.

And as soon as you die you become tactics guy going around, looking for bad guys and helping your team [players don't respawn in Horde until the next level - instead, they get to navigate around the environments in a sort of God Mode] - because you want to play more. That and with the story and cinematics we're really going to surprise some people. My fiancée cried - I mean who does that with an action game? I think we really did something...

Dr Michael Capps is president of Epic Games. Interview by Keith Stuart.

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